Eight years after the collapse of Lehman Brothers, FutureBrand’s global head of strategy Tom Adams reflects on how the public perceives financial services organisations. In 2014, when his global brand consultancy first began polling professionals in 17 countries to see how they perceived the firms in PwC’s list of global top 100 companies by market capitalisation, there was a “significant negative perception” of banks and investment companies, says Adams. In 2016, that view may be changing.
“Last year, we began to see a softening, but still no strengthening in perception,” he says. “This year, we’re seeing a rising tide for financial services generally, albeit from a low base.” Published this summer, the most recent FutureBrand Index shows that financial services has grown as strongly as a category as consumer services companies such as Amazon and Inditex, which owns Zara.
According to Adams, financial services may be benefitting from a correction, and the ways in which technology has transformed customer experience in banking just as it has in retail. “Survey respondents aren’t telling us this directly, but I think we’re seeing a correlation,” he says.
The aim of the FutureBrand index is to create a model for understanding the drivers of twenty-first century organisational and brand success – the qualities of a “future brand”. The survey’s participants are posed a series of questions about a brand’s purpose and their experience of it, to determine how trustworthy, purposeful and consistent it is, and whether it has a clear vision for the future. The brands which perform above average against those statements qualify as a future brand. This year, 24 of PwC’s top companies made the cut.
The power of perception
Why is perception important? “Quite often, people reduce organisational strength to financial strength. But today, financial strength and size are no guarantees of success,” says Adams. “Look at Kodak and Blockbuster – digital disruption and new technologies have brought about massive changes in their markets.”
Indeed, the 24 qualifying future brands have a larger market capitalisation than the average on PwC’s list. “That’s interesting in itself,” he says. “But as the total value of all PwC’s companies rose from 2014-15, and shrank over the last year, the future brands have also grown by more, and shrunk by less. They’re better insulated against decline and more likely to grow in times of growth.”
This year’s index saw perception strength increase most for large, globalised Chinese firms (Ping An Insurance topped financial services, helping to buoy the category as a whole) and companies like Walt Disney, Amazon and Nike which offer excellent consumer services.
In a year when Amazon has expanded into the grocery market and is providing ever quicker delivery, it has climbed up the rankings by 26 places to eighth position. “We put that down to Amazon having a strong ‘why’ and converting it into a customer experience,” says Adams. “It’s at the forefront of how digital can transform a business and change the drivers of consumption.”
Tech companies haven’t grown by as much in perception terms, though they are coming from a strong base. Apple however, which tops the future brand list overall, continues to improve. It is where companies outperform their category that Adams and FutureBrand want to gain insight as the years go by and more trending data about changing attitudes can be acquired.
What’s in a name?
Some useful strategic insights are already emerging in the area of name changes, for example. The merger to create Walgreens Boots Alliance has significantly improved people’s perceptions. “When you put names together, it doesn’t count against perception strength,” he says. “Those firms have the potential to tell a broader story. But a name change can also allow a company to broaden its portfolio of activities unhampered by its category.
“However, if you change your name to give your company a new meaning, that has to ground itself in people’s understanding of you,” says Adams.
“We’re at a turning point at which Alphabet is starting to take its huge financial power and think about the next wave of change in growth, investing in bioengineering firms, for example. It could be that this hasn’t fed into people’s awareness yet.”